Earned Value Management Handbook Earne VAMan

Earned Value

Management

Handbook

Earne

Valu

March 2013

Association for Project Management

Ibis House, Regent Park

Summerleys Road, Princes Risborough

Buckinghamshire

HP27 9LE

?Association for Project Management 2013

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system

or transmitted, in any form or by any means, without express permission in writing of the Chief

Executive of the Association for Project Management. Within the United Kingdom exceptions are

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rights organisations, such as the Copyright Licensing Agency. Enquiries concerning reproduction

outside the terms and in other countries should be sent to the Publishing Rights Department of the

Association for Project Management at the address above.

Readers are responsible for the correct application of the information in this publication and

its conformity with all relevant legal and commercial obligations. The Association for Project

Management cannot accept any legal responsibility or liability for any errors or omissions in this

publication or the consequences thereof.

All registered trademarks are hereby acknowledged and the publisher makes no claim to these

trademarks.

British Library Cataloguing in Publication Data is available

ISBN 10: 1-903494-47-8

ISBN 13: 978-1-903494-47-9

Table of contents

Contents

1

Introduction 7

2

Overview

8

3

Definition

39

4

Planning 57

5

Data collection 77

6

Analysis, review and action 80

7

Change management 114

8

Risk management

119

9

Systems review

127

10

Learning from experience 148

11

The Earned Value 32 Criteria 160

12

Earned Value equations 163

13

References and further reading 165

14

List of figures

165

15

List of tables 166

16

Earned value abbreviations and acronyms

167

17

Glossary 168

18

Section index

171

Preface

The Earned Value Management Handbook is the culmination of the Association for Project Management¡¯s Planning,

Monitoring and Control Specific Interest Group¡¯s (SIG) work to date.

It represents the effort of practitioners, academics and other stakeholders who have all given their time, knowledge

and experience.

There is no finer testament to the idea that peer to peer conversation produces work of substance and value, while

fostering a sense of collective purpose, achievement and service.

To all who have contributed, this book is for you and your communities.

This is only the end of the beginning. I am hopeful that this work will help you keep calm and carry on.

Good luck and let us know how you get on.

You can help by contributing to the next edition.

Steve Wake

APM Planning, Monitoring and Control SIG Chairman

4

Foreword

In 2008, I was asked to write the foreword to the Earned Value Management: APM Guidelines. It provided the reader

with a solid grounding in the ¡®why¡¯ and ¡®what¡¯ of earned value that needs to be done to ensure successful project

implementation and delivery.

That publication did not include the detailed information on how to implement and use such a system. This

handbook provides that missing link. APM¡¯s Planning, Monitoring and Control Specific Interest Group (SIG) has

drawn upon a vast array of experience to create not just an EV handbook; it is also linked to the first EV practitioner

examination in Great Britain. Another milestone has been reached in equipping our project managers with the

knowledge and skills they need to deliver ¨C on time, to budget ¨C and to keep repeating it.

The 2012 Olympics were held in venues across Great Britain, built and delivered with earned value at their very

core. At all times we knew what we needed to do, as well as when and how much. By adopting this technique, this

herculean task was not only delivered on time but also gave back over ?950 million pounds of taxpayers¡¯ money.

As part of the learning legacy of the Games we concluded that the project was a success due in large part to a

back-to-basics approach. Doing the right things right.

If we can deliver projects in this way ¨C so can you. Earned value remains the tool of choice, an internationally

recognised standard framework for considering, controlling, informing and managing projects.

Earned value projects may not always win gold but its use helps you do the best you can. An Olympic ideal for us

all in our lives.

Sir John Armitt

Chairman, Olympic Delivery Authority

5

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